PROJECT MANAGEMENT

Reynolds Construction Company

BY

2008MBA036

10
1. F
5
A

Sta En
5 2
rt d
G

C 2 E

Activity Original no. of No of weeks to New weeks for Additional Cost

weeks crash by each activity
A 3 1 2 5,000
D 5 2 3 8,000
G 4 2 2 14,000
F 7 2 5 6,000
B 6 1 5 6,000
Total 8 39,000

a. Total cost for the project is now $(61,000 + 39,000) = $100,000

b. The new critical paths are AF; ADG and BG. Hence, three critical paths exist.

c. The path that has slack is the CEG path and the slack time is one week
 ADG – CEG. 7 – 6 weeks

2. F
7
A

Sta En
6 4
rt d
G

C 2 E

Activity Original weeks No of weeks New number of Cost for the

reduced by week for activity D reduction
D 5 2 3 8000

In revising to complete the job within ten weeks, the new critical path will takes a total of 10
weeks. This is done by reducing activity D by 2 weeks. The reduction will cost $8000.

Cost of initial planning = $61,000 Increase in cost as a result of reducing activity D by two
weeks = $8,000 Hence final cost = $(61,000 + 8,000) = $69,000.

The new critical path for doing the project within ten week would be paths BG, AF and ADG
3. F
7
A

Sta En
6 3
rt d
G

C 2 E

Using the critical path diagram for remote building project from exhibit 2, the steps to keep the
project on track are:

Increase activity C to 5 weeks, we have to reduce activity G by one week to bring the path CEG
to 10 weeks as required and reduce D by one week. Hence

Activity New weeks for Cost

each activity
A 3 5,000
B 6 14,000
C 5 7,000
D 4 14,000
E 2 8,000
F 7 11,500
 G 3 17,000
Total 76,500

d. Total cost for the project is now $76,500

e. The new critical paths are AF; ADG and CEG.

4. Option A

Given the scenario from question one, it is obvious that the project could not be reduced more
than 7weeks owing to the fact that the critical path has minimum possible time it could be
reduced.

. F
5
A

Sta En
5 2
rt d
G

C 2 E

Activity Original no. of No of weeks to New weeks for Additional Cost

weeks crash by each activity
A 3 1 2 5,000
D 5 2 3 8,000
G 4 2 2 14,000
F 7 2 5 6,000
B 6 1 5 6,000
Total 8 39,000
f. Total cost for the project is now $(61,000 + 39,000) = $100,000

Using total project duration of 7 weeks

The total cost = 100,000

Penalty for delay = 1 week X 10,000

Total cost = 100,000 + 10,000 = 110,000

Option B

Following the revised – program schedule for remote control building project from Exhibit 4.

. F
7
A

Sta En
6 3
rt d
G

C 2 E

Planned cost + additional cost = $61,000 + 16,000 =$77,000

Using the total number of weeks of 9 weeks for the project,

Total cost at 9 weeks = $77,000

Penalty per week = $10,000

Extra week to suffer penalty = 9 – 6 = 3 week

Total penalty = 3 X 10,000 = 30,000

Total cost = 77,000 + 30,000 = 107,000

Hence, my action is to take option B, because it has the cheapest cost ($107,000) for
executing the project.